CA Spent $4 billion on Medi-Cal for People Not Eligible

MedizinCalifornia spent $4 billion on Medi-Cal coverage between 2014 and 2017 for people who may not have been eligible for the government-funded health plan, according to a state audit released Tuesday.

Medi-Cal provides health coverage to 13.1 million Californians, approximately one-third of the state’s population. To qualify, a single adult must make less than $16,754 annually.

County workers typically determine whether someone is eligible for health coverage under Medi-Cal, then send that information to the state. But the records don’t always match up.

The audit found 453,000 beneficiaries who were marked as eligible in the state’s system, but not in the counties’ — indicating that they may not have actually been eligible for Medi-Cal. These beneficiaries may have died, moved or begun making more money and no longer qualified for Medi-Cal. …

Click here to read the full article from the Los Angeles Times

California’s Single-Payer Health Care Plan Would Be Costly and Risky

MedizinSingle-payer health care is e a major issue in California’s 2018 gubernatorial election. Democratic candidate Gavin Newsom has strongly endorsed the idea, while Republican candidate John Cox is opposed. Last year, a single-payer bill, SB 562: The Healthy California Act, passed the state Senate but was placed on hold in the Assembly.

SB 562 would replace the current health care system with a state program under which all provider claims are paid centrally with no network restrictions, deductibles, co-pays, or other limitations. One governing body would replace the current array of public and private insurers. Medicare, Medi-Cal, and the Children’s Health Insurance Program (CHIP) would be integrated into the new system.

Proponents of single-payer primarily tout its ability to move the state towards universal coverage. However, California is already fairly close to achieving universal coverage. The June 2017 CDC report states that only 6.8 percent of Californians are uninsured. The other 93.2 percent already have private insurance, Medi-Cal, or gained insurance through Covered California during the Affordable Care Act (ACA) expansion.

Creating a single-payer health care system would be enormously costly, time-consuming, and difficult from a political and implementation standpoint. If achieving universal coverage is the primary goal, existing insurance schemes and government programs could be expanded to cover the uninsured instead. If Medi-Cal coverage is considered insufficient, it could be enhanced without impacting other categories of insurance.

A major argument from proponents of single-payer is the claim that it saves money by eliminating profits and administrative overhead — money that is going to insurance providers. Relative to all health care costs, these amounts are quite small. Most California residents already have coverage either through the government (Medi-Cal or Medicare) or a non-profit provider (Kaiser Permanente or Blue Shield), so profits only enter into the equation for a minority of Californians. Second, SB 562 would remove incentives to control costs, eliminating managed care. As a result, provider charges would probably increase substantially, overwhelming any savings from the elimination of middlemen.

Kaiser Permanente, the nation’s largest non-profit health plan and the insurer for many Californians, is known for its high quality of care and cost-conscious decision-making. A single-payer system would eliminate managed care organizations, and with them, the years of efficiency gains made to eliminate wasteful spending and improve quality. A statement by Kaiser’s CEO last year emphasized the difference between universal coverage and single-payer, mentioning his hesitations with single payer’s outdated fee-for-service model.

Perhaps the most daunting challenge of a single-payer system is the price tag. Analyses estimate that implementing a single-payer system would cost California between $330 billion and $400 billion per year, and there are reasons to believe that these estimates are too low. To put the potential costs in perspective, the entire California state budget for 2018-2019 is $201.4 billion. SB 562 does not provide details about how funds would be raised to pay for single-payer.

Furthermore, SB 562 has no mention of cost control measures, while explicitly saying there will be no co-pays, deductibles, or premiums. It plans to cover all medically necessary care, including medical, vision, dental, hearing, and reproductive services. Other services like chiropractic care and acupuncture would also be fully covered under the new program.

Many other countries have universal health care coverage and better health outcomes than the United States, an argument frequently used in favor of single-payer. However, many of these countries utilize free-market mechanisms that promote cost-conscious decision-making. These include price transparency, fewer regulations, consumer choice, and cost-sharing to prevent overuse of services.

Aside from the fundamental problems aforementioned, there are considerable political and legal roadblocks associated with implementing a single-payer system in California. Assuming that tax increases would be a necessity for funding purposes, a key obstacle would be gaining the two-thirds vote requirement for passing any such increases in the state legislature. Other obstacles include Proposition 4 of 1979, referred to as the Gann Limit, which limits state and local appropriations. Implementation of a taxpayer-funded single-payer system would necessitate repealing the Gann Limit or exempting the new taxes from the limit. Proposition 98, passed in 1988, requires that a certain amount of state tax revenues be diverted toward education funding and taxes for a single-payer system would fall into this category. So, once again, voters would have to approve exempting these new taxes from Prop. 98.

Proponents of the single-payer system believe that the new taxes needed to fund it could be addressed in legislation without requiring voter approval. The California Budget & Policy Center sees this as “very unlikely,” since it would require amending the state Constitution. When it comes to Proposition 98, the likelihood of exempting new taxes is less clear, since it depends on differences between the General Fund and Special Fund, potentially opening the door to a lawsuit.

Much uncertainty exists about the possibility of rolling federal funding into the California Health Fund (a new fund from which the state government would pay all medical expenses). The federal government funds Medicare and most of Medi-Cal, setting or at least influencing eligibility rules. This creates a hurdle to covering undocumented immigrants; federal funds are currently not allowed to finance any of the social services provided to this population.

The combination of the political and legal complications, SB 562’s enormous price tag, and the lack of cost-control measures and long-term funding uncertainties need to be carefully considered by Californians. Vermont tried to implement a single-payer health care system in 2014 but ultimately abandoned it following a myriad of challenges. Vermont had a population of 625,000 residents at the time. California’s is home to nearly 40 million people. Increasing access to health care is a laudable goal, but changes to the system should focus on improving health care outcomes for patients and  improving the quality and affordability of care. Increasing the state government’s role in health care is unlikely to deliver those results.

This article was originally published by Reason.com

Bill to Provide Free Healthcare for Adult Illegal Aliens Dies in CA Legislature

MedizinCalifornia Senate Bill 974, which would provide for “full-scope” Medi-Cal health benefits to all illegal aliens, died in the State Assembly after concerns about up to $3 billion in new costs.

“SB-974 Medi-Cal: Immigration Status: Adults” failed quietly in the Assembly’s Appropriation Committee on August 18, despite an effort to save part of the bill by reducing the cost of taxpayer coverage to $200 million by only covering adult illegal aliens 65 years and older.

After the Democrat-controlled California legislature passed “Health for All Kids” (SB 75) in 2016, which extended full Medi-Cal benefits to 200,000 illegal alien children under the age of 19, Senator Ricardo Lara (D-Bell Gardens) promised that he would fight to expand coverage to all adults who would be eligible, regardless of their immigration status.

When Lara introduced SB 974 on April 2, he told Politico that despite President Donald Trump’s crackdown on immigration, California Democrats continue to believe that health care is a civil right for all residents. “California has never waited for the federal government, or for a political climate, to be able to take leadership on a whole host of issues,” he said.

Lara and other California Democrats had been claiming that there would be no added taxpayer burden from SB 974, because California is already paying for poor undocumented adult illegal aliens through emergency rooms across the state.

But the non-partisan California Legislative Analyst’s Office (LAO) examination in May of the financial impacts of SB 974 revealed the cost for extending the coverage to full-scope Medi-Cal coverage for all eligible adult illegal aliens would be $4.74 billion — a $3 billion increase in the taxpayer burden above what is currently provided to illegal aliens through emergency rooms alone. …

Click here to read the full article from Breitbart.com/California

CA Budget: 9% increase considered “frugal” by Democrats

California Gov. Jerry Brown points to a chart showing the growth of the state's Rainy Day fund as as he discusses his proposed 2018-19 state budget at a news conference Wednesday, Jan. 10, 2018, in Sacramento, Calif. Brown proposed a $131.7 billion state spending plan, dedicating $5 billion toward the fund. (AP Photo/Rich Pedroncelli)

When the annual California budget debate began inearnest with Gov. Jerry Brown’s release of a proposed 2018-19 fiscal plan in January, progressives were ready to go with a long list of new spending proposals. Many hoped to both expand the social safety net and to make existing state welfare programs more generous.

But nearly six months later, as final work on the budget wraps up, Brown’s dominance of state finances has gone all but unchallenged. Any assumption that a lame-duck governor in his final year would have less clout has long since been disproved.

For the fiscal year which begins Sunday, the state will have a $138.6 billion general fund. Spending on special funds dedicated to specific programs and on bond debt will bring the total overall budget to $199.6 billion.

Brown made some concessions during the budget process. The state will spend an additional $600 million on programs to help local governments deal with homelessness; give an additional $344 million to the CSU and UC systems; and provide $90 million more for monthly CALworks welfare payments.

But new spending is dwarfed by the billions of dollars the state continues to set aside in reserves. Nearly $14 billion is expected to be in the state’s “rainy day” fund and $2 billion more in other funds by the end of fiscal 2018-19 – so much so that the state may soon have to cut the sales tax to prevent reserves from exceeding constitutional limits.

The governor has emphasized building up reserves because of his frequently voiced belief that the state is overdue for a recession. Because by far the state’s biggest source of money is income and capital-gains taxes paid by the very wealthy, revenue can plunge rapidly when Silicon Valley stumbles. A decade ago, in the first fiscal year after the Great Recession, revenue fell $20 billion – leading to cuts in spending on public education and welfare programs under Brown’s predecessor, Arnold Schwarzenegger.

The freshness of this budget pain in the memories of dozens of long-serving state lawmakers has made even some ardent liberals open to the governor’s relative frugality.

No expansion of Medi-Cal to undocumented adults

This was evident in the resolution of the fight over access to Medi-Cal, the state program providing health care to the poor. Some Bay Area and Los Angeles County Democrats pushed hard for giving regular, full access to the subsidized care to older unauthorized immigrants, not just to children, as is now the case.

But the governor never budged. All progressives got out of Brown was an agreement to form a commission that will “broadly study California’s health care needs” – a concession that was dismissed as meaningless by some groups which had hoped for much more, according to a Los Angeles Times report. Cynthia Buiza, executive director of the California Immigrant Policy Center, told the Times that the “budget deal is devastating for the health of all that call California home. … We are specifically disappointed that our low-income immigrant neighbors, friends, colleagues and communities will continue to suffer from [Medi-Cal] exclusion.”

Republican lawmakers were largely on the sidelines in shaping the budget. While some praise Brown for restraining his fellow Democrats, others challenge the narrative that he is frugal. A recent budget op-ed in the Los Angeles Times offered some support for this skepticism. It noted that total spending will go up by 9 percent from the current fiscal year to the next one – more than four times the rate of inflation.

California one step closer to expanding Medicaid for illegal immigrants

Healthcare costsCalifornia is one step closer to expanding Medicaid for illegal immigrants in the state, with legislation from both chambers of the legislature that could reach Democratic Gov. Jerry Brown’s desk.

The California State Assembly last week passed a measure that would expand a current program, introduced in 2015 by Brown, which provided Medi-Cal coverage for undocumented minors under the age of 19. The new legislation, introduced by Democratic State Assemblymember Dr. Joaquin Arambula, expands that program to cover undocumented young adults up to age 26.

“The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions,” the Assembly bill read. “The federal Medicaid program prohibits payment to a state for medical assistance furnished to an alien who is not lawfully admitted for permanent residence or otherwise permanently residing in the United States under color of law.”

Arambula’s bill was initially slated to cover all undocumented adults, but was amended to expand coverage to just young adults under 26 years of age. That bill is expected to be considered in the California State Senate. …

Click here to read the full article from Fox News

CA Democrats Pushing to Give Illegal Adults Full Health Care Benefits

MedizinCalifornia Democrats are reportedly pushing to give full healthcare benefits to illegal immigrant adults, which would mean that the Golden State not only may have to raise taxes but will also be a magnet for even more illegal immigrants.

According to a Monday Politico report, state Senator Ricardo Lara (D-Bell Gardens) is leading the charge by reportedly arguing that “California needs to be a laboratory for social change by taking the lead on progressive causes.”

“We are trying to address the fact that, whether you like it or not, our undocumented community needs the care, and we are paying for it anyway,” he reportedly said.

Politico points out that California Democrats are trying to extend the state’s Medi-Cal program this legislative session to nearly 1.2 million illegal immigrant adults who would qualify for it, and “companion bills in the state Assembly and Senate” have already “passed their respective health committees with party-line votes.”

The cost to expand Medicaid coverage to adult illegal immigrants in California is reportedly projected to cost $3 billion annually.

California Governor Jerry Brown, who extended Medi-Cal coverage to illegal immigrant children in 2015, has not commented on the pending measures but “is required by law to sign or veto bills passed this session by Sept. 30, just five weeks before the midterm elections.”

Political and health analysts are reportedly astounded that Democrats are trying to extend healthcare benefits to illegal immigrants before this year’s important midterm elections, reportedly saying that the measure would give Republicans in California relevance “they would never have before” in an election cycle in which House races in California could decide which party controls Congress.

Paul Ginsburg, director of the USC-Brookings Schaeffer Initiative for Health Policy, told Politico that the proposal would be “fiscally very dangerous” and  Jay Bhattacharya, a Stanford physician and health economist, suggested to the outlet that such a plan would have to be paid for with tax increases.

Bhattacharya also pointed out the obvious—giving full healthcare coverage to illegal immigrant adults will make California, which is already an official “sanctuary” state, even a greater magnet for illegal immigrants.

The illegal immigrant who murdered Kate Steinle, for instance, told authorities that he came to San Francisco after being previously deported five times because he knew San Francisco was proudly a “sanctuary city.”

“If you make a program like this available, undocumented workers in other states might be attracted to California because of this,” Bhattacharya, the Stanford physician, reportedly said.

This article was originally published by Breitbart.com/California

Assembly wants to spend $1 billion on health coverage for illegal immigrants

California, flush with cash from an expanding economy, would eventually spend $1 billion a year to provide health care to immigrants living in the state illegally under a proposal announced Wednesday by Democratic lawmakers.

The proposal would eliminate legal residency requirements in California’s Medicaid program, known as Medi-Cal, as the state has already done for young people up to age 19.

It’s part of $4.3 billion in new spending proposed by Assemblyman Phil Ting, a San Francisco Democrat who leads the budget committee. Assembly Democrats also want to expand a tax credit for the working poor, boost preschool and child care, and increase college scholarships to reduce reliance on student loans.

They also would commit $3.2 billion more than required to state budget reserves. …

Click here to read the full article from the Sacramento Bee

Prop. 52: California Voters Approve Limitations on the Use of State Fees Paid by Hospitals

NHS-nurse-hospital_2519626bProposition 52 was adopted by the voters on Nov. 8 to protect quality assurance fees paid by hospitals to capture more federal Medi-Cal dollars. Prop. 52 is an initiative statutory and constitutional amendment which increases the required vote threshold from majority to two-thirds for the Legislature to amend existing law that imposes these fees on hospitals for the purpose of obtaining federal Medi-Cal matching funds and that directs those fees and federal matching funds to hospital-provided Medi-Cal health care services.

The ballot measure’s proponents call it the Medi-Cal Funding and Accountability Act. Prop. 52 also eliminates existing law’s sunset date and declares that law’s fee proceeds shall not be considered revenues for purposes of applying the state’s spending limit or determining required education funding in accordance with current state law.

According to a fiscal estimate prepared by the Legislative Analyst and Director of Finance, the enactment of Prop. 52 will result in “state savings from increased revenues that offset state costs for children’s health coverage of around $500 million beginning in 2016-17 (half-year savings) to over $1 billion annually by 2019-20, likely growing between 5 percent to 10 percent annually thereafter.

“Increased revenues to support state and local public hospitals of around $90 million beginning in 2016-17 (half-year) to $250 million annually by 2019-20, likely growing between 5 percent to 10 percent annually thereafter.” To put these amounts in perspective, several years ago while the state was in a financially dire position, $260 million was diverted to general fund uses.

According to the official ballot arguments, a YES vote on this measure meant: “An existing charge imposed on most private hospitals that is scheduled to end on January 1, 2018 under current law would be extended permanently. It would be harder for the Legislature to make changes to it. Revenue raised would be used to create state savings, increase payments for hospital services to low-income Californians, and provide grants to public hospitals.”

According to the proponents of Proposition 52, the measure extends the current state Medi-Cal hospital fee program which generates over $3 billion a year in federal matching funds that pay for health care services for children, seniors and low-income families. Proposition 52 prohibits the Legislature from diverting this money for other purposes without voter approval.

On the other hand, also based upon the official ballot arguments, a NO vote on this measure meant: “An existing charge imposed on most private hospitals would end on January 1, 2018 unless additional action by the Legislature extended it. Removes all accountability and oversight of over $3 billion of taxpayer dollars. Gives $3 billion to hospital CEOs with no independent audit and no requirement the money is spent on health care. Public funds can be spent on lobbyists, perks and salaries for hospital bureaucrats instead of children and seniors.”

By way of background provided by the independent Legislative Analyst Office, the Medi‐Cal program provides health care benefits to low‐income Californians who meet certain eligibility requirements. These health care benefits include services such as primary care visits, emergency room visits, surgery and prescription drugs. Currently, Medi‐Cal provides health care benefits to over 13 million Californians. Total spending on Medi‐Cal in 2015‐16 was roughly $95 billion, of which about $23 billion was from the state’s General Fund.

The cost of the Medi-Cal program is shared between the state and federal governments. Public and private hospitals provide care to people enrolled in Medi-Cal. There is a quality assurance fee (QAF) that the state has imposed upon most private hospitals. It has been collected since 2009. The QAF has generated about $18 billion in federal funds since that time and has benefited more than 7 million children and 1.6 million seniors, according to the proponents of Prop. 52.

According to the LAO, the hospital QAF results in a net benefit to the hospital industry and monies from the QAF result in state savings. The Legislature and federal government have previously approved extending the QAF. Under Prop. 52, the hospital QAF has been made permanent and the State will be limited in its ability to either change or end the QAF. This change will also eliminate the uncertainty whether the program will continue.

Prop. 52 includes the following Statement of Findings:

“A. The federal government established the Medicaid program to help pay for health care services provided to low-income patients, including the elderly, persons with disabilities, and children. In California this program is called Medi-Cal. In order for any state to receive federal Medicaid funds, the state has to contribute a matching amount of its own money.

“B. In 2009, a new program was created whereby California hospitals began paying a fee to help the state obtain available federal Medicaid funds at no cost to California taxpayers. This program has helped pay for health care for low-income children and resulted in California hospitals receiving approximately $2 billion per year in additional federal money to help hospitals to meet the needs of Medi-Cal patients.”

In addition, the measure contains the following Statement of Purpose: “To ensure that the fee paid by hospitals to the state for the purpose of maximizing the available federal matching funds is used for the intended purpose, the people hereby amend the Constitution to require voter approval of changes to the hospital fee program to ensure that the state uses these funds for the intended purpose of supporting hospital care to Medi-Cal patients and to help pay for health care for low-income children.”

As a constitutional amendment, Prop. 52 classifies the revenue generated under this ballot measure as a trust fund. Moreover, these fee proceeds are exempt from the minimum school funding guarantee law (Prop. 98). These trust fund revenues can be used to offset state costs. The purpose is to protect the funds and ensure they are properly spent for their intended purpose.

There are instances in which the hospital QAF can become inoperative, such as where the federal government denies approval of the matching funds or the relevant federal agency (CMS) decides that the QAF cannot be implemented. The state may have to make certain modifications to the QAF program to comply with relevant changes to federal law.

As a result of the enactment of Prop. 52, the hospital QAF will be made permanent (unless the federal government eliminates the matching program) and it will be difficult, even in tough budget times, for the Legislature and governor to swipe these fees, the obvious intent of the ballot measure’s proponents. Time will tell whether the opponents’ claims of no oversight will be accurate. In the meantime, the hospital QAF will continue while the federal funding program is available.

Chris Micheli is an attorney and legislative advocate with the Sacramento governmental relations firm of Aprea & Micheli. 

A Quick Guide to the 17 State-Wide Ballot Measures

VotedI know what you’re thinking as you look at the 224-page voter guide to 17 statewide ballot propositions, and it’s not printable in a family newspaper.

Still, with California effectively under one-party rule, you and the ballot initiative are the closest thing we have to a system of checks and balances. So here’s my personal guide to help you do the job.

Yes on Proposition 54 to require that bills in the Legislature be posted online in their final form for 72 hours before lawmakers vote on them. This ends the abusive practice of slamming backroom deals into unrelated or blank bills as an “amendment,” then rushing them to the floor for a vote before anybody else can read them.

Yes on Prop. 53 to require voter approval before the state can borrow $2 billion or more for state projects by issuing revenue bonds. This affects the proposed Delta tunnels water project. Revenue bonds are repaid by charging the users of whatever they’re issued to build. If you use water, that’s you.

Yes on Prop. 52 to protect a program devised by California hospitals to secure available federal matching dollars for Medi-Cal. The hospitals pay the state to help fund Medi-Cal, which then qualifies for matching funds, and then the hospitals get most of their money back. The “most” part is the problem. Vote yes on 52 to keep politicians’ hands out of the Medi-Cal cookie jar.

On the rest, I’m voting no.

Taxes and education: Prop. 55 extends a temporary income-tax hike on high-earners until 2030, but the school budget crisis is over, and a top state tax rate of 13.3 percent makes California uncompetitive with other states for the small businesses that create most of the jobs in America. Prop. 51 soaks taxpayers for $9 billion plus interest to build schools so new-home developers can escape higher fees. Prop. 58 repeals the 1998 “English for the Children” initiative and reinstates bilingual education, and it could lead to some students being automatically enrolled in bilingual classes even if parents don’t request it or want it.

Criminal justice: Prop. 57 empowers state prison officials and parole boards to release many state inmates early, regardless of enhanced sentences. Prop. 62 abolishes the death penalty. Prop. 66 changes death penalty procedures to limit and speed up state appeals.

Substances and drugs: Prop. 56 puts a $2 tax on cigarettes and extends tobacco taxes to vaping products. Prop. 64 legalizes recreational marijuana, but it also launches a massive new state bureaucracy to regulate, track and tax every plant from seed to sale, and it’s still illegal under federal law. Prop. 61 orders some state agencies to pay no more for prescription drugs than the price paid by the U.S. Department of Veterans Affairs, likely leading to pre-discount price hikes. …

Click here to read the full article from the L.A. Daily News.

Obamacare Sinking Under Weight of Math

Healthcare costsThe Affordable Care Act is collapsing, and President Obama blames Republicans.

Writing in the Journal of the American Medical Association, the president accused Republicans of undermining the health care law’s implementation. “It has come at a cost for the country,” Obama wrote, “most notably for the estimated 4 million Americans left uninsured because they live in GOP-led states that have yet to expand Medicaid.”

But expanding Medicaid also has come at a cost.

Medi-Cal, as Medicaid is called in California, has enrolled almost 5 million people since January 2014, when the Affordable Care Act expanded eligibility for the safety-net program. In 2010, 7.4 million Californians were covered by Medi-Cal. Today it’s more than 13 million, about one-third of the state population.

Covered California, the health care exchange where federally subsidized policies can be purchased from private insurers, has enrolled just 1.4 million people since it went online in the fall of 2013.

Is the dramatic expansion of Medi-Cal a success story?

Not if you run a hospital. California pays Medi-Cal providers less than it costs to provide the care to patients. The more people they treat, the more money they lose.

In 2009, hospitals in California were losing a total of about $2 billion annually on the care they provided to Medi-Cal patients. Today it’s about $8 billion.

The federal government provides matching funds for state Medicaid programs. To help California bring home every available federal dollar, the hospitals came up with the idea of paying a fee to the state, which would be put into the Medi-Cal program to help it qualify for matching funds. Then the state would have more money and could pay the hospitals for providing care to Medi-Cal patients.

It may sound like a game of three-card monte, but the California Hospital Association says the program has helped hospitals lose only $5 billion on Medi-Cal patients instead of $8 billion.

The hospital fee program was written into state law in 2009 and renewed three more times, most recently in 2013. It was well-supported but still bumpy: The state took a $1 billion annual cut of the hospital fees to pay for children’s health programs, and occasionally some of the hospital fees were diverted to other budget priorities.

So the hospitals are asking the voters of California to lock the hospital fee program into the law permanently. It will be on the Nov. 8 statewide ballot as Proposition 52, the Medi-Cal Funding and Accountability Act.

The measure has the endorsement of …

Click here to read the full article